Delivering Alpha Live: Peltz, Einhorn to discuss post-election stock market, economy

CNBC’s Delivering Alpha in New York City features the market’s top investors on the outlook for stocks and the U.S. economy after Donald Trump’s reelection and an extended bull market rally.

Nelson Peltz says Trump’s tariffs will be a negotiating tool

Notable activist investor Nelson Peltz believes President-elect Donald Trump will use tariffs as a negotiating tool to convince Europe and others to lower duties on U.S.

“I think he intends to do it, but I think our trading partners are going to change it. I mean, why should a Chevy in Paris costs over $100,000,” Peltz said.

“I think Trump is right. I think the threat of the tariff will bring these guys in line. I think we need that. That’s where to start the negotiation. That’s his style, you know, come to the table with a hammer and see what happens,” Trian Partners’ founding partner and CEO said at the conference.

Trump made universal tariffs a core tenet of his economic campaign pitch, floating a 20% tax on all imports from all countries with a specifically harsh 60% rate for Chinese goods.

— Yun Li

Nelson Peltz says need to ‘obliterate’ antisemitism

Trian Partners CEO Nelson Peltz says he has been trying to convince a portfolio company to not register in Holland after last weekend’s antisemitic attacks that occurred around a football match between a Dutch team and team from Israel.

“You really must come down hard and obliterate it. There’s no room for it, no room for any of this stuff in America.”

“To see all these horrible things the Nazis did, and here we are, we’re gonna let this get started all over again?”

—Eric Rosenbaum

David Einhorn see ‘the most expensive stock market’ since he got into investing

For top hedge fund investors such as David Einhorn, if it’s not time to call a market a bubble or be outright bearish, elevated price-to-earnings ratios should result in caution. In a recent letter to his investors, Einhorn called it the “most expensive” market since his hedge fund Greenlight Capital was founded in 1996.

Einhorn went on a “buyers’ strike” at the end of 2023, but came back into the market acquiring medium-sized positions in names like software firm Alight and drugmaker Viatris.

Last month, he made a bullish case for Peloton, saying the shares are significantly undervalued.

Investors will be interested to hear if he’s still finding any values. “We think Paul Tudor Jones is right when he says that managing the last third of a great bull or bear market move is often the toughest,” Einhorn said in his recent letter to investors.

—Yun Li

Actually, hedge funds might prefer a Democrat in the White House

There’s been a rush of enthusiasm on Wall Street regarding Donald Trump’s election win, but hedge funds actually generate more alpha when the White House is occupied by a Democrat president than a Republican one, according to hedge fund database HFR, reviewing data going back to 1991.

When compared with the S&P 500, the industry underperformed regardless of who was president. But during Democratic administrations, the gap was about 183 basis points, with hedge funds delivering average, annualized returns of 10.16%, compared to 11.99% from the S&P 500. The underperformance gap during Republican administrations was 331 basis points. (1 basis point equals 0.01%.)

Of course, making predictions about what the next four years entails for stock pickers based on politics is hard to do. In the end, hedge fund returns are far more correlated with positioning relative to various asset-class performances than particular policies by any administration.

—Leslie Picker